Kinder, gentler VAT

If we can believe Mirek Topolánek, he's been reborn a kinder, gentler soul. He now takes every chance to apologize for his vulgar and unfriendly ways. He also now admits that some of Vlastimil Tlustý's objections to the tax reforms are valid. Turning Mr. Nice Guy is one thing, but Topolánek mainly needs to quit bamboozling Czechs on what his reforms will do. For example, he and his cohorts like to portray the hike in the 5% VAT rate to 9% as a progressive tax that will hit the rich more than the poor. The rich consume more, Topolánek says, so they'll be taxed more. Well, yes, but the rate will still be 9%. This makes VAT a proportional tax, but it acts more like a regressive tax, because the poor spend a greater proportion of income on consumption. A kinder, gentler Topolánek would admit his mistake and meet Tlustý (and the poor) halfway by cutting the 19% VAT rate to 17%.